Legacy parts makers and newcomers are shifting to an EV supply chain

As automakers, battery manufacturers and governments spend unprecedented sums of money to ramp up electric vehicle production in North America, parts makers are pouring in billions of dollars of their own to supply those new factories.

Each new EV project requires a new supply chain where one didn't exist before, including battery systems and modules, battery enclosures, electric motors, power inverters, charging ports and onboard monitors. New EV programs in greenfield locations will also draw forth new supplier plants even for traditional components, such as seating, plastics and brake systems.

Companies that win a place on these new EV programs range from some of the largest and most established parts suppliers in the world to relatively unknown players in the North American industry looking to gain a foothold in a rapidly growing market for EV components and battery materials.

These are some of the EV-related supplier projects already underway.

American Axle & Manufacturing is reportedly considering a $460 million EV research and supplier park next to its Detroit headquarters. The campus, called Project Orb, would be an "office/research and supplier park supporting the concentration of the company's EV investment in Detroit and Michigan rather than competing for international and other domestic locations," according to a document filed with the city. It would employ 1,110 people and be built on a 50-acre manufacturing site.

But American Axle has revealed little publicly, telling Automotive News sibling publication Crain's Detroit Business that it would consider investment in Detroit "if favorable conditions present."

BorgWarner in April said it will invest $20 million into three of its Michigan facilities to accelerate EV product development, testing and manufacturing.

The largest share of the investment is slated for Hazel Park, near Detroit, where the Michigan company plans to spend $10.6 million in large part to develop a new EV battery service center. The 100,000-square-foot testing center will service "all BorgWarner batteries in North America," focusing on testing, diagnostics and training, the supplier said in a news release. BorgWarner also plans to add a battery module assembly line to its existing Hazel Park facility to boost production.

Robert Bosch in April said it will acquire California microchip maker TSI Semiconductors and spend $1.5 billion to meet growing demand for EV semiconductors. If the acquisition is approved, the German supplier giant said it intends to convert the plant site near Sacramento, Calif., which would be its first chip-making facility in the U.S., into a source of silicon carbide chips for use in EVs by 2026.

Bosch expects the market for silicon carbide chips, which it also makes at a facility in Germany, to grow by about 30 percent annually over the next several years. According to the supplier, silicon carbide semiconductors are more efficient than standard silicon-based microchips and could help boost EV battery range as much as 6 percent.

The U.S. Department of Energy in May said it plans to loan $362 million to California EV wiring components startup CelLink to help the company build a new factory in Texas. CelLink expects the factory to produce flexible circuit wiring harnesses to support around 2.7 million EVs a year when fully operational. The loan is conditional on several factors, though what those are has not been revealed. CelLink, founded in 2011, has received financial backing from BMW and Ford, as well as Lear and Robert Bosch. Its products are in about 1 million EVs today, according to the company.

Work on the suburban Austin factory is underway, with production expected to begin as soon as July. The company expects to increase capacity at the plant in "five-line increments" as demand for its products rises, capping out at 25 manufacturing lines in total.

Dana Inc. said last year it plans to spend $54.2 million to open a plant north of Detroit that will build cooling plates designed to extract heat from lithium ion battery cells. The plant, operated by Dana's thermal products unit, is expected to employ 200 people by 2024.

The investment is an example of how the Ohio company, a longtime supplier of powertrains to the auto industry, is attempting to reposition itself to win new business as EVs take up a larger share of vehicle production in the coming years.

Entek said in March it will invest $1.5 billion to build a manufacturing campus in western Indiana to support its growing EV business. The Lebanon, Ore., parts maker produces battery separators for lithium ion batteries — a critical component that serves as a physical barrier between the cell's anode and cathode.

In a news release, the company said it plans to build four separate buildings totaling 1.4 million square feet, which will be "capable of supporting 1.4 to 1.6 million EVs annually" by 2027. The supplier did not identify which automaker programs it expects to serve. Entek will break ground on the campus by next year with a production launch date by 2027. The project, which received $8 million in tax credits from the Indiana Economic Development Corp., is expected to hire 642 people by the time the campus is complete.

Lear Corp. will spend $112.5 million to expand three facilities in Michigan to boost its EV components business. The investment includes the construction of a 120,000-square-foot facility in Independence Township, northwest of Detroit, and the expansion of operations in Sterling Heights, Mich., and Traverse City, Mich.

The Southfield, Mich., supplier said it will build electrical subsystems for EV batteries, including battery disconnect units.

General Motors selected Lear last year to supply battery disconnect units and other components for GM's Ultium EV platform.

The Independence Township location will be used for production, warehousing, testing and office space, while the existing plants in Traverse City and Sterling Heights will supply the new factory.

Linamar Corp. said in May it will break ground on a 300,000-square-foot plant near Niagara Falls in Ontario featuring three 6,100-ton gigacasting presses for the production of large aluminum structures for EVs. Linamar CEO Linda Hasenfratz said the plant will serve as a "flagship location" for the Canadian parts supplier as it maps out its lightweighting strategy, according to Automotive News Canada.

On a May 10 conference call with analysts and investors, Hasenfratz said the company has received interest from automakers but did not name the first customer. But the new plant will begin production by 2025. Linamar also did not disclose the cost of the investment, though the project is expected to take up a "big chunk" of the company's capital expenditures, she said. Linamar projects a significant increase in global capital expenditures this year over 2022.

Magna has committed to spend more than $600 million on two plants near Detroit and Toronto to build EV battery enclosures, which house high-voltage batteries and other key EV components. Late last year, North America's largest auto supplier said it will spend $426 million to expand a plant in St. Clair, Mich., by 740,000 square feet, and revealed in February that the factory will supply the 2024 Chevrolet Silverado EV.

Magna also said it plans to spend $198 million at a plant in Ontario to produce enclosures for the Ford F-150 Lightning and other Ford models. The Canadian supplier foresees big business in battery enclosures as EV production ramps up, saying in a news release that it can tailor them to meet individual customer needs and make them in steel, aluminum or lightweight composites.

Nidec Corp. plans to spend about $715 million to open a plant in Mexico that will manufacture e-axles for EVs.

According to Reuters, the Japanese motor manufacturer, which already builds e-axles in China and Europe, intends to produce e-axles in Mexico to cater to auto customers in the region.

The investment comes as Nidec seeks growth in its e-axle business. It anticipates selling about 1.2 million e-axles in fiscal 2023 — about double what it sold in 2022. Nidec is planning for global production capacity of about 7 million e-axles a year by 2026.

Westwater Resources Inc. is constructing a $202 million graphite processing plant in central Alabama that will produce as much as 7,500 metric tons of the material in its first phase of construction. The Colorado graphite company is looking to sell "ultra-high-purity, coated, spherical, purified graphite" for use in anodes in lithium ion batteries, according to its website.

In May, Westwater signed a deal to develop anode material for South Korean battery maker SK On. SK On expects to source Westwater's materials for use at its U.S. battery manufacturing facilities, according to a news release. SK On operates one battery plant in Georgia, and has three others underway in Georgia, Kentucky and Tennessee, the latter two in partnership with Ford Motor Co. under the BlueOval project.